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UPS Union Issues
Contract deal soon?
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<blockquote data-quote="JonFrum" data-source="post: 206171"><p><strong>Withdrawal Liability. Mandated by Congress Since 1980.</strong></p><p></p><p>The fact that all withdrawn companies owe Withdrawal Liability payments to these multi-employer pension funds is also part of why multi-employer funds are considered "self-insured," and why the Congress (wrongly) allowed them to be more underfunded than single-employer funds. The participating companies are legally obligated to cover their own employee's vested benefits 100%, either through regular monthly contributions or ultimately through Withdrawal Liability payments.</p><p></p><p>Bankrupt companies often stiff pension funds by not paying the last few monthly contribution payments, and by not paying their Withdrawal Liability. When this happens, the company's employees stop accruing pension credits, and the company is sued by the fund to recover as much of the monies owed as possible. </p><p></p><p>Small companies who fail to read what they sign are sometimes shocked to learn that they owe Withdrawal Liability when they think they can save money by exiting the fund. Stockholders of large companies like UPS, whose stock just can't seem to rise, may fail to realize that the Withdrawal Liability owed to Central States equals the entire company profit for 2006. And then there is all the Withdrawal Liabilities owed to the other funds as well! </p><p></p><p>Central States has a higher portion of retirees than other funds, and by law, cuts must be concentrated among active employee's only, and can only effect their *future* benefit accmulations. Active employee's already-earned benefits are normally untouchable, just like those of retirees, and people who are no longer in the fund but haven't aged enough to start actually collecting checks yet. Painfull as they are, the cuts are temporary.</p><p></p><p>Usually current retirees are paid off in full when the pension fund buys them an annuity from an insurance company on their retirement date. The payment of these retirees' monthly benefit checks is the responsibility of an insurance company, not the fund. Retirees with small benefit amounts, are usually directly paid off in one lump-sum payment.</p></blockquote><p></p>
[QUOTE="JonFrum, post: 206171"] [b]Withdrawal Liability. Mandated by Congress Since 1980.[/b] The fact that all withdrawn companies owe Withdrawal Liability payments to these multi-employer pension funds is also part of why multi-employer funds are considered "self-insured," and why the Congress (wrongly) allowed them to be more underfunded than single-employer funds. The participating companies are legally obligated to cover their own employee's vested benefits 100%, either through regular monthly contributions or ultimately through Withdrawal Liability payments. Bankrupt companies often stiff pension funds by not paying the last few monthly contribution payments, and by not paying their Withdrawal Liability. When this happens, the company's employees stop accruing pension credits, and the company is sued by the fund to recover as much of the monies owed as possible. Small companies who fail to read what they sign are sometimes shocked to learn that they owe Withdrawal Liability when they think they can save money by exiting the fund. Stockholders of large companies like UPS, whose stock just can't seem to rise, may fail to realize that the Withdrawal Liability owed to Central States equals the entire company profit for 2006. And then there is all the Withdrawal Liabilities owed to the other funds as well! Central States has a higher portion of retirees than other funds, and by law, cuts must be concentrated among active employee's only, and can only effect their *future* benefit accmulations. Active employee's already-earned benefits are normally untouchable, just like those of retirees, and people who are no longer in the fund but haven't aged enough to start actually collecting checks yet. Painfull as they are, the cuts are temporary. Usually current retirees are paid off in full when the pension fund buys them an annuity from an insurance company on their retirement date. The payment of these retirees' monthly benefit checks is the responsibility of an insurance company, not the fund. Retirees with small benefit amounts, are usually directly paid off in one lump-sum payment. [/QUOTE]
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